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Is it wrong to have an emergency savings in case of divorce?


As much as you try your hardest, not all relationships end with a happily ever after. In fact, some can quickly turn into a real nightmare. Does this mean you should prepare for the worst sooner rather than later?

Do not attempt to adjust your screen, this is a serious question. In a quest to protect oneself from an undesirable “what if” situation, it looks like some are planning their marital exit strategy before the ink dries on their reception check. Most of us have heard of an emergency savings account in the event of a life hardship, but what about saving for a divorce?

I thought it was a joke, but apparently, folks are real serious about this one.

Now before you rush off to create an emergency savings account of your own, Samara Terrill, a registered financial advisor in Oklahoma wants you to reconsider as separate doesn’t automatically mean yours. “Any funds acquired during the time of the marriage are considered marital assets — unless they were received via inheritance, gift, judgement or specifically excluded in a prenup,” notes Terrill.

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Samara is also quick to point out the legal risks of trying to keep such an account secret as it can potentially show up in a financial report during your divorce. “You would be asked to disclose all your assets, and if you failed to do so, you would perjure yourself, possibly facing bigger issues — including a loss of much larger percentage of assets.”

Still, there are people who are willing to take the chance as they save for what might be the end of their relationship. You probably can think of at least one person in your life who would do something like this. At least three of my friends come to mind who would have such a savings account. In fact, I know one who already does.

A graduate of Columbia University, my girlfriend Leah spent many years working in New York City as a lawyer before she met her husband. He works in finance (go figure) and makes more than enough for the both of them. Once the kiddos started rolling out, they both decided it would be best if she stayed at home. Leaving her job and financial security, Leah had to come to grips with her new reality: relying on one person for her money needs.

The criticism she received for leaving her career made her super-paranoid about the future. If for whatever reason her marriage failed, Leah wouldn’t have immediate access to the same cash flow to rebuild her life.

“This is why I have an emergency savings,” notes Leah. “In case of divorce.”

Like saving for retirement, Leah keeps a percentage of the money she receives (I assume from her husband) in a special account. While it’s not the same as receiving a paycheck, her dedication to the cause continues to add up to a small fortune. Too bad her husband has no clue about her “just in case” account or the fact that he makes monthly contributions.

More: The book I wish I had when I was going through my divorce

As much as I think it’s important for women to save for the future, I personally don’t like the idea of a divorce savings account — especially if your spouse is clueless about what’s going on. Divorce certainly is real, but I don’t think planning for one is the way to go. Why can’t you just save in a personal account for a rainy day? God forbid you call it quits with your spouse, but you can use it to “consciously uncouple.”

When I asked other married friends what they thought, most understood the reasoning but didn’t like the concept.

“If you found out your husband was stashing away money on the side, would you be as open-minded as you’d like him to be?” my friend Angela questioned. “More than likely not.”

“There’s something about a secret divorce fund that sounds so… horrible,” adds Claudia. “In many ways, you already imagine things going south in your head to prepare.”

I get why some women — especially stay-at-home moms — might feel they won’t have enough to support themselves in the event of a divorce. After all, they can get very costly and nasty. No matter how inadequate you might feel when it comes to trying to stack your wallet against your husband, it’s important for women to see the value in themselves in order to think clearly about the next steps. “A stay at home mom is a valued partner in the marriage. Do not downplay that,” says Terrill. “While he may be the one physically bringing home a paycheck, that is only possible because you are fulfilling both yours and his responsibilities in the home with the children while he works.”

When it comes to this type of partnership and divorce, Samara points out a type of financial support that might get overlooked. “A stay-at-home mom is able to receive a check for her spouse’s social security when she becomes of social security age. This is also true for an ex-spouse assuming they are not remarried.

More: 7 Things that make you more likely to get divorced

So how can women who face divorce make sure their spouse isn’t hiding money? “Knowledge is the key,” mentions Samara. In addition to staying on top of bank accounts you have (and their balances), she also recommends tracking retirement accounts and major withdrawals your spouse makes. “Do not just focus on cash accounts, also be aware of accounts such as brokerage, non-brokerage, and retirement and savings accounts,” says Terrill. “Also, do not overlook items that may be held in the house such as collectibles, guns and precious metals that could easily be liquidated.”

Do you think spouses should fund separate accounts in case of divorce?

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